Avoid These Five Outsourcing Mistakes

Small business owners are now enjoying the benefits of outsourcing, and start-up companies want to follow in their footsteps. In this age of outsourcing, it has become easier to grow your business without the heavy costs.

However, companies shouldn’t dive into outsourcing without fully understanding it. Just because it worked for a similar business to yours doesn’t mean it will work as effectively for you. The services rendered by outsourcing providers are tailored to specific needs.

Whether you are a start-up or just considering switching providers, it is important to avoid these five outsourcing mistakes some entrepreneurs commit in order to guarantee a successful outcome:

Outsourcing only for the sole reason of cost saving

Never sacrifice the quality of work with price. Lowering your standards just for the sake of saving could even result in having all the work re-done and worse, cost you more than the initial project. You should aim for cost-efficiency and cost-effectiveness.

Not understanding the process you want to outsource

Only outsource things that are outside your core competency. Don’t outsource tasks that can be automated. For example, you won’t need to hire someone who will send out newsletters or sift your e-mails – there are tools available for these.

Employing the wrong people

No matter how urgent a job is, you should never rush into an agreement without assessing a person’s skills and experience. Outsourcing itself is risky, and the last thing you want is to hire someone who is incompetent in handling the tasks your company couldn’t handle either.

Failing to evaluate your performance

Your company should have an objective in the first place. Before you outsource, set specific and measurable goals. Then measure your company’s performance with these standards, so you’ll know if you’re able to achieve these.

Lacking guidance from the company

Just because you outsource your business process doesn’t mean you won’t need any managers. You still need to hire and train someone who will look after your outsourced team. Having the right management team ensures a good flow of communication between the two parties.

Outsourcing is not a straightforward remedy to your problems. You have to understand the industry and be prepared, to avoid ending up with these costly mistakes.

The Outsourced Accountant supports Australian and New Zealand accounting firms by helping them understand and implement outsourcing solutions to help them become more proactive and truly add value to their clients.

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